Everyone else may be getting out their sweaters, but on eBay,
holiday time is the hottest season. For many brick-and-mortar
retailers, November and December are the make-it-or-break-it
months, when the offline world racks up as much as 50 percent of
annual sales and an even larger percentage of profits. So it's
not surprising that eBay sellers report that the holidays are
important to them as well. "We probably do a little more than
a third of our business in that period of time," says Jenanne
Hassler (eBay User ID: jenanne), who, along with her husband, sells
an average of $3,000 worth of video games and video-game books each
month on eBay from Waynesville, North Carolina.

Many larger eBay sellers have similar experiences. Jeff Hess,
54, owner of Hess Fine Art in St. Petersburg, Florida, does close
to $5 million annually on eBay, selling vintage watches, jewelry,
art and antiques. About 25 percent are holiday sales, says Hess
(eBay User ID: hessfine), who adds that since he began emphasizing
eBay over his brick-and-mortar store several years ago, the
holidays have become even more important. "In the past, like
most vintage retailers, we didn't have a very active Christmas
season," Hess says. "Our season was essentially over by
November 15. With the advent of eBay, we found we were more like
the standard Christmas holiday retailers, [which see an increase
during the holiday season]."

There are a couple of reasons why the holidays are critical for
eBay sellers. One is that eBay increases its advertising budget
during the holidays, executing a wide array of marketing,
advertising and promotional tactics to encourage buying holiday
gifts on eBay. Every retailer should take advantage of the
significant effort eBay makes to drive traffic to its site during
this crucial time of year.

Another reason is that eBay is so mainstream, it can't help
but be affected by society as a whole, says Debra Schepp, a writer
in Middletown, Maryland, who co-authored eBay PowerSeller Secrets:
Insider Tips From eBay's Most Successful Sellers.
"It's becoming more and more true as people are more
comfortable with shopping on eBay--and devoted to shopping on
eBay," Schepp says. "Plus, there are lots of things that
make it convenient [for buyers] to shop on eBay, like the fact that
you can offer [them] gift-wrapping and direct shipping to
recipients. That makes eBay competitive with any online shopping
[destination]." The proof, Schepp says, is the fact that the
biggest shopping day of the year--the day after Thanksgiving--is
the same for both offline retailers and eBay sellers.

Best Sellers
Since making the most of the holiday season is a priority for most
businesses on eBay, where do you start? First and foremost, sell
what people want to buy. So what are the hottest holiday items on
eBay? "It all depends on what you're selling," says
Marsha Collier, author of eBay Business All-in-One Desk Reference
for Dummies. "That's the magic [of] eBay. People can come
and buy just about anything, and people want just about
anything."

The holiday hotties on eBay tend to mirror what's hot
elsewhere (and often what you can't find elsewhere). As a
marketplace of many small sellers rather than one dominated by a
few mega-retailers, it's truly a democratic free-for-all, with
the decision about what sells ultimately resting in the hands of
the buyers. "Since what's for sale on eBay isn't
dependent on a big corporation or a bunch of executives deciding
what to sell this season, it's a reflection of what's
happening [all over] America," Schepp says. "Anything
that's popular somewhere else is going to be turning up on
eBay."

With that in mind, eBay sellers who want to make the most of the
holidays should make it a point to know what's selling well in
society at large during the period. When an in-demand item is hard
to find offline, buyers turn to eBay. For instance, notes Schepp,
when the iPod was scarce in traditional brick-and-mortar channels
last year, units were still available on eBay--and selling like hot
cakes.

A few recurring themes outline what makes a product hot during
the holidays. For instance, Hassler, 37, says higher-end rare books
sell better during the holidays than at other times of the year. In
other words, if you're selling products like watches during the
holidays, think Rolex. Bundled products--items sold together at a
special price--are also better sellers during that period, Hassler
says: "It's a focus on items that may not sell during the
[rest of the] year because you're not going to buy them for
yourself, but you're going to put them on your wish
list."

One-of-a-kind custom orders also move better during the holidays
for Bob Kitchener, owner of Dangerous Threads, a Nashville,
Tennessee, eBay retailer of leather goods and craft items (eBay
User ID: bobkitchener). "Custom stuff is really good at
Christmastime, along with customized things like [guitar] straps
and belts with names on them," says Kitchener, 53.

The price tag is likewise a key indicator of what will sell for
Hess. "It seems like everything expensive sells better during
the holidays," he explains.

To know everything about what sells, you'd have to survey
all eBay sellers, or at least a large sample of them. Luckily, you
can use a variety of tools that track, analyze and report on the
bestselling items instead. The "Hot Categories Report" is
an eBay tool for sellers that lists Hot, Very Hot and Super Hot
categories each month based on factors including month-over-month
bid growth, bids-per-item and conversion rate. To view the report,
go to Seller Central, click on "What's Hot,"
then click "Hot Items by Category." eBay Pulse gives you a
sense in real time of what people are looking for. You can also
find out what items are hot in a particular category by going to
Seller Central, clicking on "Category Tips," and clicking
on "In Demand" under any category.

There are also third-party sources for information on what's
hot for the holidays. Terapeak Marketing Research licenses eBay transaction
data and goes back as far as a year to provide its own "Hot
List" reports. Andale is a third-party subscription service that
includes detailed research tools, including information on
hot-selling products.

Finally, don't neglect to place at least some trust in your
own well-honed instincts, advises Jim Migdal, senior category
manager for eBay Toys & Hobbies. He's been impressed and
occasionally amazed at how eBay retailers seem to intuitively stay
ahead of hot-item trends. "Our sellers just have a nose for
that stuff," he says. "And they find it and get it on the
site."

It's All in the Timing

There is more to making the most of the holidays than having the
products everybody wants. Shipping policies and procedures, timing,
site design, payment options, sourcing and more all play roles in
getting the most from the year-end opportunity. Of them all, timing
may be the most vital. Experts and experienced sellers all sing the
same tune: Start early.

"You have to start very, very early," stresses Hess.
"Online, people tend to shop early, so we start about October
15." Why so soon? Hess explains that his listings generally
run 10 days. "If we start October 15, those seemingly early
auctions will end October 25, the following ones will end November
3 and so on," he says. "We'll have only six to eight
cycles to take full advantage of the Christmas holiday
[season]."

Others say October is late. "Theoretically, it starts on
Thanksgiving, but there's a lot of planning that starts before
then," says Joseph T. Sinclair, author of eBay Business the
Smart Way. "If you don't plan, you're going to get
caught short. You won't know whether to promote something
because you won't know whether you're going to get it in
stock. September should be the target [planning] date for the
[holiday shopping] season, so everybody's ready to go in
November."

Early is the time to line up a trusted source of supply,
especially for items you think will be your best movers. "Make
sure you have reliable suppliers who are going to deliver when they
say they will," stresses Schepp. "What could be worse
than trying to put your listings up on December 15 because the
product you were promised by November didn't show up [on
time]?"

Another key early task is staffing. "This is not a time to
scrimp," says Schepp. "You might have to hire people to
get your shipments out, and those are things you don't want to
be putting in place the first week of December. You want to make
sure you have everything ready to go."

You may also want to change your look and feel. "Have your
webmaster dress up your pages with a Christmas theme instead of
using your normal template for your [item listings]," suggests
Sinclair. One specific suggestion is to take advantage of the eBay
gift icon. The wrapped-gift logo tells shoppers you can help them
check an item off their to-do list by gift-wrapping their purchases
and mailing them directly to gift recipients.

Shipshape Shipping
Offering gift-wrapping and delivery to a gift recipient can be a
powerful word-of-mouth tool for expanding your marketing, says
Barbara Weltman, a small-business consultant and author of The
Complete Idiot's Guide to Starting an eBay Business. When the
wrapped gifts arrive, recipients will be exposed to your business,
Weltman says. "This is an opportunity to reach people who
aren't your customers, and perhaps gain new
customers."

You may want to offer free shipping on Buy It Now items, says
Schepp. "If you offer it strictly for Buy It Now customers,
you're giving them a little bonus, and you're also
encouraging people who want to get their shopping done and
don't want to wait five or six days for your [listing] to
end."

Whether you decide to offer free shipping or not, make sure you
ship sold items quickly, says Kitchener. "The main thing we do
is ship fast, especially at Christmastime," he says. "You
get all kinds of people with deadlines." Dangerous Threads
ships via the U.S. Postal Service and FedEx Ground, and usually
ships items within 24 to 48 hours, which gives most shoppers enough
cushion to make sure their items arrive in time for the
holidays.

Because of those deadlines, take extra care to clearly explain
shipping policies in your listings. Consider how you could simplify
your shipping policies to make everything as fast and easy as
possible for the hurried gift-purchaser. Says Hassler, "We
include a standard shipping rate to the U.S., Canada and other
international locations so people aren't slowed down by having
to write to us and ask for [the shipping costs]."

When designing holiday listings, make sure your terms include
accepting payment through PayPal. Faster payment means faster
shipping, which makes it easier for shoppers to make their
deadlines.

To make it even more likely that gift-buyers will make their
deadlines, you can and should consider refusing to guarantee
holiday arrival after a certain date. "People will buy things
on the 23rd of December, expecting to have them before
Christmas," explains Hassler. "That's been a problem,
so we'll quit having [listings] a few days before."

Kitchener stops selling some products much earlier, particularly
custom items. "We make some beautiful custom guitar
straps," he says, "and we'll cut off the orders for
those about three weeks before Christmas because of the shop time
required to make the items." Be sure not to promise buyers
items you can't deliver.

Hess employs a more complex solution. As the number of days
before Christmas shrinks, Hess Fine Art reduces the lengths of its
listings. From the usual 10 days, Hess goes to seven-, five-,
three- and even one-day listings. The formula is simple:
"Count the days to Christmas, subtract the days for shipping,
and figure when those auctions will end."

Selling Policies
You should also consider your terms of sale. Start by thinking
about adding more Buy It Now items. "Impulse buys are better
that way," says Hassler, who does primarily Buy It Now sales
during the holidays instead of the auction-style listings that are
her usual method. "People don't want to wait a week to get
a book that someone else may have on Buy It Now." To increase
the speed of the sale, use Buy It Now with immediate payments
through PayPal. The transaction is instantaneous and saves you
critical time spent waiting for payment.

During the holidays, it may be more important for you to offer
PayPal Buyer Credit, which allows your buyers to finance their
purchases through GE Money Bank, the financial entity behind PayPal
Buyer Credit. "During the rest of the year, it might not be
worthwhile for some sellers," says Sinclair. "But during
Christmas, when everyone is scrambling for money to buy gifts, they
might [offer] it for one month."

When everyone is scrambling, they're more likely to buy the
wrong item, one that doesn't fit, or one that just isn't
what the recipient had in mind. For that reason, returns tend to go
up during and shortly after the holidays. So it's important to
keep a relaxed attitude toward customers who, after being
relatively easy to please all year, have suddenly turned uncertain,
demanding and difficult during the holidays.

"You have to be a little more liberal and a little more
giving and caring," as Hess puts it. "You have to be more
friendly and more forgiving, because clients are more emotional
then in their buying habits."

Holiday Hurdles

Holiday selling isn't, in fact, all about having fun and
making a bunch of money. The holidays present special challenges in
addition to trickier sourcing and more frequent returns.

For instance, if you gift-wrap and send items directly to the
recipients, you won't be protected by the PayPal Seller
Protection Policy, because that applies only when items are sent to
verified addresses. You'll need to decide how much your
customers will appreciate being able to ship wrapped gifts directly
to recipients, and balance that against the value of PayPal
coverage. "It is very convenient to have items shipped
directly to the recipient," says Collier, who adds that you
don't have to advertise your gift-wrap policy, but can apply it
on a case-by-case basis. "If you get a special request and the
person has a good feedback rating and you're comfortable with
the situation, you might want to do it," she says. If you do
choose to offer gift services, practice your due diligence.
It's a great strategy for the holidays that could lead to many
more sales.

Another issue: Since every other holiday-savvy eBay seller is
going to be tuned in and looking for the next hot product, it's
going to be that much harder for you to be first. And if you do
happen to find yourself with a garage full of hot-selling items,
your holiday-happy rivals may realize it nearly as soon as you do
and flood the market with their own similar items. "If you
find something is selling really well, you can't be complacent
with it," warns Schepp. "Ultimately, it's going to
show up on the hot list, and everybody's going to see it. You
can easily end up with an overstocked item when the bottom drops
out." Use eBay resources such as the "Hot Categories
Report" and Completed Items searches to keep tabs on the
competition and avoid having too much "me, too" product
on hand.

Remember, as eBay has grown into a global, multi-cultural
phenomenon, the meaning of the holidays has gotten less clear in
terms of the entire audience of buyers on eBay. So while you should
certainly try to take advantage of the end-of-the-year gifting
binge, it's also important to do it in a way that recognizes
cultural differences. Many eBay buyers don't celebrate
Christmas, Hanukkah, Kwanzaa or other year-end holidays, or they
celebrate differently.

For instance, in Canada, the biggest shopping day of the year is
traditionally not the day after Thanksgiving, but the day after
Christmas, a holiday known as Boxing Day and celebrated in
Australia, Canada, Great Britain and New Zealand. Keep such
differences in mind. Advertising only a "holiday sale"
instead of a "Christmas sale" will help you remain
inclusive. "You need to be selling for everybody,"
advises Collier, who suggests simply promoting a "sale"
in your listing titles and saving the rest of the character count
for important keywords.

If there's one overriding and enduring theme to the
holidays, it may be that this is when you should keep an open mind,
be creative and be willing to do things differently. While it's
certainly nice to get some extra sales at the holidays, it can be
even better to learn something new that will help sustain your
sales throughout the year. "The holidays are a great time to
experiment because there's a lot of traffic," says
Sinclair. "If you want to experiment with what sells and what
doesn't, what sells better on sale and off, you'll get
better feedback during the holidays than at other times of
year."

What Not To Sell

Experienced eBay sellers say there's not always an obvious
reason why some items move better during nonholiday periods, but it
does happen. Jeff Hess, owner of Hess Fine Art in St. Petersburg,
Florida, says, "It's difficult to sell large diamonds on
eBay [during the holiday season]. Not expensive diamond
jewelry--[that's] easy to sell. But large solitaires, one carat
and up, are difficult."

Likewise, holiday shoppers at Dangerous Threads, based in
Nashville, Tennessee, snub the leather-craft supplies that are
mainstays the rest of the year. Owner Bob Kitchener thinks he knows
why. "It stands to reason," he says. "You don't
want to hand somebody a gift of a pile of rivets." Generally,
experts say, holiday-unfriendly items can be anything not usually
regarded as a gift.

Celebrate All Year Long
Don't assume you've got it made because you nailed
Christmas. The final quarter is the biggest for most eBay sellers,
but it's not the only important holiday season. For some on
eBay, it's not even the most important. "Halloween is a
real good one," says online sales expert Debra Schepp.
Valentine's Day and Mother's Day herald sales surges for
flowers, perfume, candy and jewelry; themed decorations can be hot
for Easter and the Fourth of July.

Make a List, Check it
Twice...
You'll be in great shape to take advantage of the busy holiday
season if you prepare in advance for the rush. This handy checklist
will help you prioritize what needs to be done:

Get started early, as many consumers start their
holiday shopping as early as October.

Check third-party sources for the scoop on
what's hot. Terapeak Marketing Research offers its own "Hot
List" reports, based on eBay data going back as far as a year.
The buzz on upcoming movies can be found at ComingSoon.net and
Internet Movie
Database. And check out "Hot Stuff" on page 48 for
our preview of 2005's top sellers.

Assess staffing requirements, and hire temps if
necessary.

Order ebay/usps co-branded shipping boxes from the
U.S. Postal Service.

Save the Dates
Your customers expect their purchases to arrive on time for the
holidays, so it's critical you ensure every item ships when you
say it will. These guidelines on shipping basics can help you stay
on top of deadlines--and keep your customers happy:

Make sure last-minute shoppers know your terms and
policies. Tell them clearly and in advance if what they're
buying won't arrive in time, or if getting it there requires
extra shipping fees.

Keep in mind that neither FedEx nor UPS delivers
on Christmas Day; however, both offer one-day shipping services. An
item shipped on December 23 will arrive the next day. The U.S.
Postal Service does not deliver normal mail on Christmas Day.
However, if an order is shipped using Express Mail, the USPS will
attempt delivery on December 25, unless it's a Sunday.

Priority Mail from USPS, which usually takes two
to three days to deliver, can take up to two weeks in the busy
month of December, so plan accordingly. Guaranteed service by your
carrier of choice is the best way to go.

Different deadlines apply when you're shipping
internationally, so check with your carrier in advance for
details.

Hot Stuff
Before making your list of products to stock this holiday season,
make sure you check out the latest "Hot Categories Report". As you approach the high
tide of holiday sales, the reports available here will tell you
where both demand and bids for items are growing.

But why stop there? There's a lot more you can do to find
out what is likely to sell well for the holidays. For instance,
some categories are always in demand. Perennial holiday winners
include cameras, cell phones, clothing, collectibles, dolls and
bears, electronics, jewelry and watches, sporting goods and, of
course, toy and hobby items.

With that in mind, this December 9, Walt Disney Co. will release
The Chronicles of Narnia: The Lion, the Witch and the Wardrobe,
based on the perpetually popular children's books by C.S.
Lewis. You can find more info on upcoming movies at ComingSoon.net and
Internet Movie
Database.

You can also find information about the categories you
specialize in. The scoop on hot toys, for instance, can be found in
forecasts by Toy
Wishes. In the spring and fall, this journal's editors list
toys they think will be most in demand during the summer and
holiday seasons. Another way to find forecasts for what will be hot
this holiday season: Type "holiday watch 2005" into an
internet search engine, and check out the results.

Sellers of dolls and collectibles can reliably predict increased
demand for certain items during the holidays. Prewar Lionel trains,
Hot Wheels cars from the 1960s, and bisque dolls from France and
Germany are always scarce and in demand at the holidays, explains
Migdal.

Climate also plays a role with holiday hot-sellers such as
sporting goods and clothing. That's why ski jackets will tend
to outsell bathing suits. And when it comes to popular categories
such as electronics and jewelry, consider offering more expensive
items than you might at other times of the year--shoppers'
wallets are open, and they are, after all, in a giving mood.

Finally, keep an eye on current events, and stay alert for
one-of-a-kind opportunities. One of these occurred when a
manufacturer mistakenly made just 6,000 Polar Express trains. Says
Migdal, "They sold out very quickly, and we saw them on eBay
for two or three times the list price." For the latest hot
sellers by category, go to Seller
Central. Click on "Category Tips," then click on
"In Demand" under the appropriate category.

Mark Henricks writes on business and technology for leading
publications and is author of Not Just a Living.